IGC: current world grain estimate falls Smaller The International Grains Council (IGC) corrects its previous monthly estimates of the world grain crop 2019/20 by about -2 million tons to 2,157 million tons. This is due to lower expectations for the Australian and Argentine wheat crop and weaker corn yields in the EU and Argentina. Upgrades were needed for wheat in the EU and Russia. Lower consumption of feed wheat and less corn for bioethanol consumption led to a drop in demand to 2,184 million t. The deficit between higher consumption and lower harvest leads to a reduction in final stocks to 592 million tonnes, 4.4% less than in the previous year. Since China does not participate significantly in the export market, but has more than 50% of the world's grain reserves, it is useful for a supply calculation to exclude Chinese quantities. The stock level - measured by the final consumption for consumption - is then only 16% instead of 27%. Compared to earlier years with 18%, a significantly lower storage potential for possibly still failing harvest results can be observed.The supply situation is even more critical when one considers the arithmetical final stocks of the eight large grain exporters with a low 155 million tonnes. In earlier years, the numbers were rather at 180 million t with a lower world demand. The global wheat supply incl. China improved by 2.3% compared to the previous year. However, if China is excluded, the final balances remain unchanged. This also applies to the market and price-determining export countries. Measured against the 2.4% increase in consumption, the supply balances will be somewhat more critical. The focus is on the southern hemisphere , whose crops are imminent in the next two months. Australia estimates that the wheat harvest is only 15.5 million tonnes, while IGC still accounts for 17 million. An average Australian wheat harvest is at least 22 million t. Similarly, the development in Argentina with repeated wheat harvests is below 20 million tonnes. This reduces the export volume of two major exporting countries.For Russia, the EU and the US , wheat yields improved slightly, but without being able to fully offset the negative results in other countries. The IGC estimates the global corn harvest at just under 1,098 million t much lower than in the previous year. Consumption, especially for industrial purposes, is also declining significantly. Nevertheless, there is a substantial 12% reduction in inventories. The main reason for this is the low harvest expectations in the US , which the IGC puts at 341 million, while the US Department of Agriculture still assumes 351 million tons. In view of the late ripening and further nationwide early frosts in the coming week, further losses are expected.
